"We always thought the canal treaty would be a great relief," said Josephus Liverpool, who drove a forklift at the local docks when he last had a job. "But people will tell you there's no change. It's more like things are getting worse."
Nearly two years after the treaties turning the Canal Zone and eventually the canal over to Panama were approved by the U.S. Senate, and four months after they went into effect, Panamanians are angry and disappointed. Liverpool is just one of the close to 20 percent of the Panamanian work force that is unemployed.
The predicted economic boom, the increased foreign investment, the heralded new political era, and other spinoff benefits from the treaties that Panamanians believed would improve life for everyone, have not begun.
For years, the battle with the "gringos" over the canal had served to boost Panamanian nationalism and unity, siphoning off political energy and defusing domestic discontent. But now Panamanians again are looking inward, and what they see in their own country has brought political problems for the government of President Aristides Royo and his military backer, Gen. Omar Torrijos, the country's strongman leader.
Popular protests following the arrival here of the deposed shah of Iran Dec. 15 were thought to be merely an extension of general discontent, an extra excuse to tell the government it is not liked.
Although the protests over the shah's presence have largely abated, the discontent goes on. Recently, two days of general strikes paralyzed the transport system, the docks, and 80 percent of industry. The Atlantic port city of Colon, the nation's most volatile spot with 40 percent unemployment, completely closed down.
The strike specifically stemmed from a controversial 1976 law giving employers the right to fire workers without explanation, a measure the government says it needs to retain a favorable investment climate.
But the broader reason for the work stoppage was the cost of living, which Panamanians say has become intolerably high. After five years of economic stagnation -- the result of international recession and local political uncertainty -- and inflation averaging close to 10 percent annually, jobs and real wages have dropped dramatically.
In this country of 2 million population, where food prices equal those of American supermarkets, many families live on the minimum monthly wage of $120. Shop assistants in a consumer's paradise of French fashions and Japanese electronic gadgetry earn little more than $200 per month.
"This is a country with middle-class expections, and people are very pinched," said a foreign resident. "There's no question there is a wide discontent and open poverty here."
The business and professional class, which has prospered under the service economy, has deep political complaints.
In October 1978, 10 years after Torrijos took power in a coup, he ostensibly stepped down as the country's chief executive. Royo, Torrijos' former education minister, was appointed president. A government political party was formed. Opposition parties were given new freedoms and elections scheduled for 1984.
But the new system does not work, the businessmen and professionals say, and the opposition has been given no real voice in the running of the government.
They complain that Royo, 39, a long-time Torrijos associate, is politically arrogant but weak and a poor administrator. Vice President Ricardo de la Espriella, a banker, is referred to as the country's "co-president."
Since Royo took over and control of the canal reverted to Panama, the government has put much of its energy into pleasing the business community, often at the expense of the lower economic classes and the left, once the base for Torrijos' support.
Yet the businessmen have not necessarily prospered either. They feel the government's new probusiness stance lacks conviction, and that the Torrijos group simply has been around too long.
"The trouble with this government is not ideological," said the chairman of a large law firm, "it is the fact that it has no credibility left. It has changed from anticommunist to leftist-nationalist and now it's put on a conservative face again. Who can go on believing all of that?"
Nonetheless, Torrijos not only delivered the canal, he also has provided more than a decade of the kind of stability that the fractured opposition might be hard-put to match.
While the opposition has complained about Torrijos' political zig-zagging, and use of firm control during the 11 years he has run the Panamanian National Guard and the country, it has never managed to patch up the squabbles among its many splinter groups of right and left.
But in recent months, several middle-class centrist parties for the first time are joining forces. Last fall, a 68-day teachers' strike became a focal point of national unhappiness and opposition, and led to one of the largest demonstrations in recent years, with more than a hundred thousand people marching in the streets.
Following those October protests, the government tried to give itself a new political strategy. It attempted an alliance with centrist and conservative groups and removed some of the leading leftists from the scene. Much-heralded Cabinet changes that were to incorporate liberal businessmen, however, have not yet taken place.
The large and ever-optimistic foreign banking and business community says there is nothing about Panama's growing political unrest that a healthy dose of foreign investment and U.S. government dollars cannot cure.
Panama's loose currency and foreign profit laws, its secret, numbered bank accounts and the provisions for tax-free foreign business already favor businessmen, many in the foreign community feel.Now that the treaties are settled, they believe new business will flow in.
Recently, for example, a delegation of 45 Japanese businessmen arrived to talk about construction of a new sea-level canal and building of a new railroad, a container port and docks.
The foreign optimists say the key factor in Panama's future is the inevitability of continuing U.S. support for the present Panamanian leadership, because its survival is seen as needed to implement the canal accords.
According to opposition leaders, the government is already acting as if it is confident of unswerving U.S. support. The National Guard's unusually heavy-handed repression of anti-shah demonstrators and the unprecedented recent expulsion of an American journalist, they say, could never have happened while the U.S. Congress was closely watching Panama before the treaty vote.
But government officials contend that Panama's serious fiscal crisis and closely linked political discontent still cannot be solved without massive outside financial help.
Panama's $2.8 billion foreign debt is larger than its gross national product and the highest per capita in Latin America. The government's cash shortage is so extreme that it abolished the Canal Authority, which coordinated canal affairs with the United States, and fired its 1,200 employes overnight -- transferring its work to other ministries.
Perhaps more critically, the government also has canceled its emergency work program, which provided 10,000 jobless poor with a $100 per month income.